Mr. Speaker, I would like to address the concerns we have in government about some of the motions we think will be detrimental to the preservation and securing of the CPP as a pension plan for all of us, for future Canadians who will be retiring.
Contrary to what the previous speaker has mentioned, it is very important to understand we arrived at the changes through rather dramatic and extensive consultations across Canada. They are the result of federal-provincial statutory review which included extensive cross-Canada consultations.
Unequivocally we heard from Canadians. They asked that their governments preserve the plan by strengthening its financing, improving investment practices and moderating the growth of the benefits.
It is not rocket science to understand it is important to improve investment procedures. I would share some examples. In years gone by in various provincial legislatures and indeed in this place pension plans have been used by governments as a cheap source of financing.
For example, the government of Ontario in the 1970s consistently went to the well to borrow funds at as low as 3% interest rates at a time when marketplace interest rates were in the neighbourhood of 10% or higher. It used that money to build roads, bridges and other facilities; but in turn what happened is that the pension fund was suffering because it was not allowed to grow.
We cannot allow this to happen with the CPP. As a result of all the consultations and what Canadians have said, we must ensure if the money is borrowed and it is used as a fund that fair market value is paid. It is simply not acceptable to rob Peter to pay Paul by using pension fund money for cheap investments with a view that somehow taxpayers will save money. At the end of the day the particular pension fund will have to be shored up. In their entirety the motions run counter to a strong fiscal policy that we believe is needed to secure the CPP.
I also share an example with which some may be familiar. Money was used from the teachers' pension fund without a proper view toward investment practices. In 1989 or so one of the teachers' pension funds in Ontario, the superannuation fund, was running at a deficit and the other one was running at a surplus. The reason for the deficit was the bad borrowing practices of previous governments. We cannot allow that to happen regardless of who is in government. The CPP funds should not be used and abused in that way. That is one very important issue.
Motion No. 11 specifically wants to delete the new contribution rate schedule. The old unsustainable rate schedule would remain in effect.
The member is sticking his head in the sand, I say with all due respect. If the motion were to be accepted by the government it would put financial sustainability of the CPP at risk. That is the very issue the changes address. In parliamentary terms it probably should not be allowed on the floor as it is totally contrary to the intent of the bill.
Instead of rates raising by 9.9% in the year 2003 and then levelling off, if the motion were adopted contribution rates would rise to 10.1% in year 2016. That happens to be a year when many in the baby boomer generation will be looking to drawing on their CPP fund. Therefore it makes it even more important to ensure the sustainability of the CPP. Then it would go to 14.2% in the year 2030. This would be a 140% increase over current contribution levels. I cannot imagine justifying contribution levels rising by that amount. It makes no sense and frankly the motion would be destructive.
Another problem, and we have done the financial analysis, is that the plan would be bankrupt by the year 2015. It would impose a totally unfair burden on our children and our grandchildren. They would loose the ability to collect the CPP.
When talking about the CPP bill, the amendment and all the motions, we must recognize that our main goal should be to sustain and secure the system now. We consider it to be a top priority in government. We have heard other members and other people talk in terms of it being a tax. The reality is that it makes us distinct as Canadians because we have a public pension plan that leaves no Canadian behind.
I have heard the example used about people being in a race. At the Special Olympics there was a wonderful example that my good friend, Dalton McGuinty, the leader of the provincial Liberal Party in Ontario, talks about. In a race in the Special Olympics one of the runners fell. Another runner who was competing to win that race, which presumably we all do from time time, stopped and picked up the person and helped him finish the race. It meant the person who stopped would not be victorious. It meant that he would not win the race. What a message it sends about Canadians and about Canada.
Yes, we will stop and help when one falls. We are all in this together. The CPP is one landmark that shows us that we as Canadians care about one another. We could ignore the problem. Some paint it as a tax grab. That is nonsense.
This plan has to be secured for future generations. The bill will do that but the motions of the hon. member will not. A key priority is to secure retirement income for all Canadians. That is why we are proposing a comprehensive plan to make the system sustainable, affordable and fair. Affordable is key.
If we want to drive rates through the roof like some of the motions are suggesting with increases in the neighbourhood of 140%, that is what we should adopt. However that will not be affordable.
I have often found a lack of realism on the part of my colleagues opposite. They think that by putting a motion forward some workers will benefit. In reality it will be unaffordable for employers. If we do not have employers we do not have jobs. If we do not have jobs we do not have CPP contributions and the plan will fail. This is all inextricably tied to the economic growth and the future of this growth.
With great respect for my colleague opposite, we will be opposing these motions on the grounds that they are detrimental to the security of the future of the CPP.